Investing.com-- Oil prices rose in Asian trade on Thursday with focus turning squarely towards more fiscal stimulus in top importer China, while traders digested the ramifications of a Donald Trump presidency.
Crude prices were nursing some losses from the prior session after Trump’s victory in the 2024 elections sent the dollar surging to a four-month high, pressuring oil markets. The greenback steadied on Thursday.
Oil markets were also pressured by data showing a bigger-than-expected build in U.S. inventories.
Brent oil futures expiring in January rose 0.5% to $75.28 a barrel, while West Texas Intermediate crude futures rose 0.4% to $71.54 a barrel by 20:19 ET (01:19 GMT).
China NPC meeting watched for fiscal cues
China’s National People’s Congress kicked off a four-day meeting earlier this week, and is widely expected to outline plans for more fiscal spending in the coming months to boost economic growth.
The world’s biggest oil importer is grappling with a prolonged slowdown in growth, and is expected to outline a sharp increase in fiscal spending. Beijing had announced a string of aggressive stimulus measures over the past month, with the NPC meeting set to provide more insight on the fiscal front.
JPMorgan analysts said in a recent note that a Trump victory could see Beijing roll out even more fiscal stimulus, given that Trump has vowed to impose steep trade tariffs on the country.
Markets digest Trump victory, more US cues
Oil prices had initially tumbled on Wednesday after Trump won the 2024 presidential elections. This initial weakness was driven by concerns that U.S. oil production will increase even further under Trump, increasing a global supply glut.
But prices curbed some losses amid bets that Trump will take a hardline stance on Iran and Venezuela, likely imposing more sanctions against the two and cutting off some global oil supply.
Trump is also expected to roll out more expansionary policies, which bode well for economic growth, and could underpin U.S. demand in the coming years.
Beyond U.S. politics, markets took negative cues from data showing a bigger-than-expected build in oil inventories.
Traders were also watching for any supply disruptions in the Gulf of Mexico from Hurricane Rafael, which is set to move through the oil-rich region this week.
A Federal Reserve meeting is also expected to conclude later on Thursday, with the central bank widely expected to cut interest rates by 25 basis points.